Accountancy Class-XII Assignment

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Tyrone Walters
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1 Chapter 1 Accounting For fundamentals Accountancy Class-XII Assignment Q1. Lata and Mamta are partners with capital of Rs. 3,00,000 and Rs. 2,00,000 respectively sharing profits as Lata 70% and Mamta 30%. During the year ended 31 st March 2005 they earned a profit of Rs. 2,26,440 before allowing interes on partner s loan. The terms of partnership are as follows: (i) Interest on Capital is to be 7% p.a. (ii) Lata to get a salary of Rs. 2,500 per month. (iii) Interest on Mamta s Loan account of Rs. 80,000 for the whole year. (iv) Interest on drawings of partners at 8% per annum. Drawings being Lata Rs. 36,000 and Mamta Rs. 48,000 (v) 1/10 th of the distributable profit should be transferred to General Reserve. Prepare the Profit and Loss Appropriation Account. [ Ans. Share of Profit: Lata Rs. 1,00,800 and Mamta Rs. 43,200] Hints (i) Interest on Loan will be calculated at 6% p.a. (ii) Interest on Drawings will be calculated for an average period of 6 months. (iii) Transfer to General Reserve will be 10% of net profit. i.e. 10% of 1,60,000= Rs.16,000 Q2. Current Account s Balances as on 1 st January, 1993 were as:- Amit : Rs.5,000 (Cr.), Namit : Rs.2,000(Cr) And Ruchi : Rs. 1,000 (Dr.), Profit sharing ration was 3:2:1. Amit get a monthly salary of Rs. 1,500. Amit draws Rs. 2,000 on the first day of each month and Namit draws Rs. 2,000 on the last date of each month while Ruchi draws Rs. 6,000 at the end of each quarter. Interest on drawings is to be 12% p.a. Profits for the year before adjustments of interest on drawings and of salary were Rs. 74,040. Show Current Accounts. [ Ans. Divisible Profits Rs. 60,000; Current A/c Amit Rs. 27,440 (Cr.) ; Namit Rs. 3,320 (Dr.); Ruchi Rs. 16,080(Dr.)] Q3. After the accounts of the partnership have been drawn up and the books closed off, it is discovered that interest on p.a. as provided in the partnership agreement has been omitted to be recorded. Their capital accounts at the beginning of the year stood as follows: A Rs. 80,000; B Rs. ; C Rs.. Their profit sharing ration was 2:1:1 Instead of altering the Balance Sheet it is decided to pass necessary adjusting entry at the beginning of the next year. You are required to give the necessary journal entry. [ Ans. C s Capital A/c Dr. 600 To A s Capital A/c 400 To B s Capital A/c 200] Q4.A,B and C entered into a partnership with capitals of Rs. 80,000, Rs. 50,000 and Rs. respectively. Each partner is entitled to interest on his 8% p.a B is entitled to a salary of Rs. 8,000 p.a and C a salary of Rs. 6,000 p.a. They decided to share profits and losses in the ratio of 5:3:2. A guaranteed that the firm would earn a profit of Rs. 60,000 before allowing interest on capital and partners salaries. The actual profit for the year 1996 before interest and salaries amounted to Rs. 56,000. Prepare Profit & Loss Appropriation A/c and the Partner s Capital Accounts. [ Ans. Balance of Capital Accounts : A Rs. 98,600; B Rs. 71,720 and C Rs. 55,680] 1

2 Chapter 2 Goodwill Q1.The average net profits expected in the future by ABC firm are Rs. 1,00,000 per year. The average Capital employed in the business by the firm is 5,00,000. The rate of interest expected from capital invested in this class of business is 15%. The remuneration of the Partners is estimated to be Rs. per annum. Find out the value of Goodwill on the basis of two years purchase of super profits. [ Ans. Rs. ] Q2. The net assets of a firm as on Dec. 31, 2001 were Rs. 4,00,000. If the normal rate of return is 20% and the goodwill of the firm is valued at Rs. 1,25,000 at 5 year s purchase of super profits, find the average profits of the firm. [ Ans. Average Profit Rs. 1,05,000] Q3. On April 1 st 2003, an existing firm had assets of Rs. 5,00,000 including cash of Rs.. The firm had a Reserve Fund of Rs. 90,000, partner s capital accounts showed a balance of Rs. 3,80,000 and creditors amounted to Rs.. If the normal rate of return is 20% and the goodwill of the firm is valued at Rs.6 at 4 year s purchase of super profit, find the average profits of the firm. [ Ans. Rs. 1,] Capitalisation Method: Q4. The average profits of a firm is Rs. 48,000. The total assets of the firm are Rs. 8,00,000. Value of other liabilities is Rs. 5,00,000. Average rate of return in the same business is 12%. Calculate goodwill from capitalization of average profits method. [ Ans. Goodwill Rs. 1,00,000] Hints: Capital Employed =Assets Liabilities. Chapter 3 Change in profit sharing Ratio Q1. A and B were partners in a firm sharing profits in the ratio of 3:1. With effect from 1 st January 2003 they agreed to share profits in the ratio of 2:1. For this purpose the goodwill of the firm was valued at Rs. 50,000. General reserves appear in the books at Rs.. Partners neither want to show goodwill in the books nor want to distribute the reserves. You are required to change by passing a single journal entry. Q2. A, B and C are partners sharing profits and losses in the ratio of 3:3:2. Their balance sheet as on 31 st March 2003 was as follows: Sundry Creditors General Reserve 2 36,000 A 2,00,000 B 1,50,000 C 1,50,000 Cash at Bank 37,000 Sundry Debtors 4 1, Machinery 1,59,000 Building 2,00,000 5,00,000 5,60,000 5,60,000 Partners decided that with effect from 1 st April 2003, they would share profits and losses in the ratio of 4:3:1. It was agreed that : (i) be valued at Rs. 1,. (ii) Machinery is to be depreciated by 10%. 2

3 (iii) A provision for doubtful debts is to be made on 5% (iv) Building to be appreciated by 20%. (v) A liability for Rs. 2,500 included in sundry creditors is not likely to arise. Chapter 4 Admission Q1. A and B share the profits of a business in the ration of 5:3. They admit C into the firm for 1/4th share in the profit to be contributed equally by A and B. On the date of admission of C, the balance sheet of the firm was as follows.. A s Capital B s capital Workmen s Compensation Fund Creditors Provided fund 2,000 Machinery Furniture Debtors Bank 6,000 86,000 86,000 Terms of C s admission were as follows: (i) C will bring Rs. for his share of capital and goodwill. (ii) Goodwill of the firm has been valued at 3 years purchase of the average super profits of last four year. Average profits of the last four years are Rs. while the normal profits that can be earned with the capital employed are Rs. 12,000. (iii) Furniture is undervalued by Rs. 12,000 and the value of stock is reduced to Rs. 13,000. Provident fund be raised by Rs. 1,000. (iv) Creditors are unrecorded to the extent of Rs. 6,000. Prepare Revaluation Account, Partners Capital Accounts and the new Balance Sheet of A, B and C. Q2. X and Y are in partnership, sharing profits in the ration 5:3 respectively. Their balance sheet is as follows.;- 28,000 7,800 Creditors Workmen s Compensation Fund Z s Loan A/c Capital A/cs: X Y 50,000 Cash at Bank Debtors Less: Provision 1,800 Investments Goodwill Plant 38,200 56,000 1,52,000 1,52,000 Z is admitted into partnership on the following terms: (i) The new profit sharing ratio will be 4:3:2 between X, Y and Z respectively. (ii) Z s loan should be treated as his capital. (iii) Goodwill of the firm is valued at Rs. 27,000 (iv) Rs. 8,000 of investments were to be taken over by X and Y in their profit sharing ratio. (v) be reduced by 10%. (vi) Provision for doubtful debts should on debtors and a provision for discount on should also be made. (vii) x is to withdraw Rs. 6,000 in cash. Give journal entries to record the above and prepare balance sheet of the new firm. Chapter Retirement and Death 3

4 Q1. A, B and C were partners sharing profits and losses in the ratio of 5:3:2. Their balance Sheet as on 1 st January, 1994 was as follows: 5,000 6,000 2,000 Sundry Creditors Employee s Provident Fund Reserve Fund Workmen s Compensation Fund Capitals: A 50,000 B 35,000 C 25,000 1, 1,33,000 1,33,000 C retires on above date and the partners agreed that: (i) Goodwill is to be valued at two years purchase of the average profits of last four year. Profits were:1990- Rs.14,440,1991-Rs., 1992-Rs. (Loss), 1993-Rs. 15,600. (ii) 5% provision for doubtful debts to be made on debtors. (iii) be appreciated by 10% (iv) Patents are valueless. (v) Buildings be appreciated by 20% (vi) Sundry Creditors to be paid Rs. 2,000 more than the book value. Pass Journal entries and prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm. Q2. The Balance Sheet of P, Q and R as on 31 st December, 2009 was as follows. Bill Payable Employee s Provident Fund Workmen Compensation Reserve Loans Capital Accounts: P 50,000 Q 35,000 R 25,000 The profit-sharing ratio was 3:2;1. R died on 30 th April, The partnership deed provides that: (i) Good will is to be calculated on the basis of 3 year s purchase of the preceding 5 year s average profits. The profits were: 2009 Rs. 2,; 2008 Rs. 1,60,000; 2007 Rs. 2,00,000; 2006 Rs. 1,00,000; 2005 Rs. 50,000. (ii) The deceased partner should be given share of profits up to the date of death on the basis of profits for the previous year. (iii) The assets have been revalued as under:- Rs. 1,00,000; Debtors Rs. 1,50,000; Furniture Rs. ; Plant and Machinery Rs. 50,000; Building Rs.3,50,000. A bill for Rs. 6,000 was found worthless. 4 Cash Sundry Debtors Furniture Patents Buildings Goodwill 2,000 8,000 13,000 60,000 6,000 50,000 90,000 1,71,000 Cash at bank 1,58,000 Bills Receivable 8,000 90,000 Sundry Debtors 1,60,000 Furniture Plant and Machinery 65,000 Buildings 3,00,000 Advertisement Suspense 5,00,000 8,31,000 8,31,000

5 (iv) A sum of Rs. 72,330 was paid immediately to R s executors and the balance to be paid in two equal annual installments together with interest at 10% p.a. on the amount outstanding. The first installment was paid on 30 th April Prepare Revaluation Account and R s Executor s account till it is finally settled Accounts are closed on 31 st December each year. Chapter Dissolution Q1. Ram, Shyam and Mohan Shared profits in the ratio of 2:2:1. Following is their Balance sheet on the date of dissolution:- Creditors Bills Payable Provision for Depreciation Capital Accounts: Ram Shyam Mohan 2,600 1,35,000 Cash at bank Debtors Plant Patents 100 Shares in X co. 300 Shares in Y co. Goodwill Advertisement Suspense A/c 50,000 75,000 5,000 18,000 15,600 2,32,600 2,32,600 (i) Ram takes over Debtors at Rs. ; at a 20% less value: and Plant at Rs.. (ii) One of the Creditors took some of the patents whose book value was Rs. 8,000, at a valuation of Rs. 4,800. Balance of the Creditors were paid at a discount of Rs. 1,200. (iii) There was a joint Life policy of Rs. 25,000 (not mentioned in the Balance Sheet) and this was surrendered for Rs.. (iv) Shares in X co. were agreed to be taken over by Shyam at Rs. 30 per share. (v) Shares in Y co. were valued at Rs. 12,000. All partners divided these shares in their profit sharing ratio. (vi) balance of the patents realised 70% of their book value. Prepare necessary ledger accounts. Q2. What journal Entries would be passes for the following transactions on the dissolution of a firm, after various assets (other than cash) and third party Liabilities have been transferred to Realisation A/c? (i) worth Rs. is taken over by partner A. (ii) Compensation to employees paid by the firm amounted to Rs.. (iii) Sundry Creditors amounted to Rs. 8,000. These were paid at a discount of 5%. (iv) There was an unrecorded asset of Rs. 2,000 which was taken over by B at Rs. 1,500. 5

6 Chapter :- Ratio analysis I Project on Segment reporting (Details already explained in class.) Chapter: Cash Flow Statement. II Project take a Cash Flow Project Statement of an Actual Company and process the same. (Details already explained in class.) III Project: Comprehensive Project. (Details already explained in class.) 6

Brilliant Public School

Brilliant Public School Seepat Road Bahatarai, Bilaspur (C.G.) Pre Board - I, 2017-18 Class XII Subject Accountancy Time: 3:00 Hours M.M. 80 Date: 19.12.2017 Tuesday General Instructions: (i) This question